Govt to give Rs 25,000 cr additional fuel subsidy

February 11, 2013 17:55 IST

The government will pay Rs 25,000 crore (Rs 250 billion) additional cash subsidy to state-owned fuel retailers to make up for part of the revenue they lost on selling auto and cooking fuel below cost this fiscal.

The Finance Ministry on February 7 issued a "comfort letter" to Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL), and Hindustan Petroleum Corp (HPCL) sanctioning Rs 25,000 crore for part of the revenue they lost on selling diesel, domestic LPG and kerosene below cost, official sources said.

Previously, the government had released Rs 30,000 crore (Rs 300 billion) subsidy. With the latest sanction it has met about 44 per cent of the Rs 124,854 crore (Rs 1.24 trillion) revenue the three firms together lost on selling auto and cooking fuel below cost during the April-December period this fiscal.